EUR/USD has halted its slide today as the dollar and U.S. yields dipped in the wake of Wednesday's Fed statement, but the worst is probably not over for the pair. While the Fed didn't signal an aggressive rate-hike path, the bank remains determined to tighten further in 2018 and 2019.
The ECB's cautious approach to normalization might grow more tentative after today.
March Euro zone inflation was below forecasts and well below Draghi's statement noting inflation is likely hover around 1.5% going forward.
Earlier, ECB's Praet said that data suggests euro area growth moderation and inflation remains subdued, BBG reported.
The opposing central bank paths are now likely to diverge further, which should bolster the preference for selling EUR/USD rallies, with expectations that new trend lows is due.
A break of the 61.8 Fib of 1.1553-1.2556 and support in the 1.1890/1.1910 zone might attract traders looking tosell rallies, which would intensify the down trend.
Supports near 1.1790 and 1.1710/20 would then come into play.